Crossing the Rubicon of Fed independence

- 16 January 2026

Geopolitics and economic data faded into the background on Thursday as investors focused on fundamentals as the earnings season gets underway. Wall Street bounced back following a two-day slide after an outstanding profit result from Taiwan Semiconductor Manufacturing (TSM) reignited a rally in the chip sector. Solid results from Morgan Stanley and Goldman Sachs also boosted sentiment as the US reporting season gets underway.

The big event of the week, with potentially massive implications, was the Federal Reserve and Chair Jerome Powell being served grand jury subpoenas from the Justice Department, threatening a criminal indictment. In a forceful written and video statement released Sunday, Mr Powell said the action was related to his June congressional testimony on ongoing renovations of the Fed’s headquarters, but warned that independence was being compromised.

It was no surprise that precious metals surged to new record highs on Monday after the news hi...